International trade involves the exchange of goods and services between nations.

Countries trade with each other in

order to import products that they otherwise could not access, and to reduce the cost of certain products for their
consumers. There are, however, a number of barriers to trade; namely, tariffs, import/export taxes and quotas on
products which can be exported to certain markets.
Despite these, countries export the goods they have in abundance, or those they can produce efficiently. When a
country can produce something more easily than other countries, it is known as a comparative advantage. Countries
generally export products they have a comparative advantage in. Additionally, exporting goods has a positive effect on
the country which is exporting them, as it grows business in export sectors and stimulates local employment in these
industries.
Australia trades with countries worldwide, with our top trading partners (in order) being Japan, the United States,
China, New Zealand and South Korea. The focus of our trade is on the Asia-Pacific Region; however, we still export
products further afield to Europe and Britain (which remains our sixth largest trading partner). The primary focus of
much of our exports are primary products minerals (coal and iron ore), and agricultural products. Iron ores and
concentrates make up 21.8% of our export industry, followed by coal, at 12.5%. Conversely, our key imported
products are personal travel, at 7.5% of total imports, and crude petroleum, at 6.1%.
One way in which Australia maintains trading links is through its membership of the World Trade Organisation
(WTO). The WTO is a global institution that aims to promote free and fair trade between member nations, and
provides a forum for member nations to discuss trade agreements, while developing world trade.
The Australian government has a critical role to play in developing relationships and facilitating trade links with other
nations. They do this through a variety of multilateral, bilateral and regional trade agreements. Trade agreements
generally remove some of the barriers to trade mentioned earlier (tariffs, quotas and taxes) and encourage trade
between member nations through giving preferential treatment to their exports. A multilateral trade agreement
involves more than one nation, and an example of such an agreement is the ASEAN-Australia-New Zealand Free
Trade Area.
Similarly, bilateral trade agreements involve two nations, and can be observed in Australias agreement with the USA,
AUSFTA. This agreement had the general aim of reducing trade barriers, (particularly in agriculture between the two
nations), but has been criticised for allowing the larger United States economy take advantage of Australias smaller
economy by exporting a great number of products, while limiting Australian agricultural imports to their market.
The Australian government also makes use of regional trade agreements, particularly within the Asia-Pacific region.
The removal of trade certain barriers to trade between APEC member nations are one such example of this, and trade
with APEC member nations accounts for around 70% of Australias trade.
Along with government organisations, Non-Government Organisations (NGOs) also have a role to play when
considering trade. Charitable organisations such as Oxfam and World Vision have a view to the way in which
Australia should develop its trade, and this is based on the idea of fair trade. While free trade is beneficial in terms of
reducing barriers to trade, it has often been criticised for allowing larger economies to take advantage of smaller
economies, particularly with relation to the manufacture of cheap goods, and agricultural products. Proponents of fair
trade argue that trade with developing countries should take into account working conditions of their labour force,
encourage development of sustainable industry through the payment of better sustainable prices.
Oxfam argues that international agricultural trade is unjust, forcing millions of farmers in the developing world to live
on less than $1 US dollar per day. They aim to prevent rich countries flooding the market of poorer countries with
subsidised agricultural products, to improve the prices paid to small, local farmers for their products, and to ensure
bilateral trade agreements do not undermine poorer farmers.
The fair growth of world trade can only mean economic development for all involved. By taking advantage of
governmental ability to develop trade agreements, and keeping the idealistic aims of NGOs in mind when creating
these, Australian trade can develop in such a way that benefits both it and the economies it trades with.